Why would you need two prices on your products? 🤯 Because there are two kinds of shoppers.
High intent shopper Alice needs what you have, or wants it right now. Shoppers like Alice make up around 2-3% of the shoppers that visit your e-commerce store.
Lower intent shopper Keira is just browsing to find something she might like that catches her eye. Mostly shoppers like Keira leave without buying anything.
She comes to your store looking for the latest and greatest, and is ready to shop. Card ready to go, she saves everything she likes to the shopping basket and pays for the speediest delivery.
When browsing an e-commerce store, she would often bounce if the price wasn't quite right. Thinking she'd go back later to see if the product is on sale. Now the sneakers or watch or sofa she'd been looking was following her around the internet and she still never went back. She had moved on.
If only the store could offer her a lower price option when she were more motivated to check out. As a shopper, she we would need to provide the store with something in return for the lower-priced option.
Could we offer a price for Keira and and a price for Alice?
We realized something that eBay had many years earlier - that shoppers like Keira could take a risk with the second price that the seller might not accept it.
Since the epiphany that retailers CAN offer two prices simultaneously, we have been listening, learning, and building non-stop. We ran hundreds of tests with shoppers and retailers. On average, we run five tests every day to improve Purple Dot. So we know how shoppers behave and what you need as retailers.
We test everything from the big questions, like will shoppers even choose the second price? (yes they will). And will ALL the shoppers want the second price? (no they won't). To smaller things like what should we call this category of pricing? (we settled on worth-the-wait pricing, shoppers understand it fast).
From all the testing, conversations, and experience with our brilliant Purple Dot partners, these are the most exciting things we learned so far.
When shoppers have this choice, they buy more
You know shoppers like choice, that's why you offer products in different colors, sizes with multiple delivery options. But shoppers also love having choices when it comes to price, as long as it's clear what trade-off they are making.
Worth-the-wait shopping is an exciting experience
Even for shoppers that miss out on the product.
Thinking back to eBay again, this should not be a surprise. You know from shopping there yourself the excitement that comes with bidding and waiting to find out if you got it.
You know the feeling of missing out, it's not the end of the world - you don't stop using eBay because of it!
And you also know how engaged you are during the waiting period. How often did you check back to see if you've been successful?
Two prices, puts more 👀 on you
You are continually vying for the attention of your shoppers. Juggling newsletter, social, and PR to make sure you are putting out exciting and creative content that hits the spot with your audience.
We learned that with worth-the-wait shopping, the open-rate on our countdown emails is through the roof, and your brand is top of mind.
An end to sales - retailers need more control
Of course you do have existing tactics to get Keira back, sales season!
When retailers are running their e-commerce stores, nothing is scarier than the end of the season approaching and having a lot of excess inventory. Retailers have to make tough decisions with no good outcome. Deep discounting devalues the brand. Writing the stock off loses even more money, with the added challenge of where it even goes.
With two prices from day one (or at least earlier in the season), the retailers have much greater control and, in many cases, can avoid running a sale altogether!
Wait, won't Alice just buy at the lower price?
Our work with retailers and testing shows that shoppers like Alice will still pay full price. She does not want to take the risk of not getting product because of her need for it. Alice is impatient for what you have and will pay a premium to be sure to get it fast.
Industries like hospitality have been using worth-the-wait pricing for many years, and the retail sector is catching up. Two prices one product helps increase sales and reduces excess inventory.
Like all good ideas, in hindsight, it's obvious.